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Pay per use: Cost effective tunneling in Portugal

June 29, 2016

Our ideas move mountains. One of many ideas is a unique model used to control costs at the Marão tunneling project in Iberia, Portugal.

High in the Marão Mountain range, close to the clouds and the sky, is one of Portugal's most beautiful, most majestic, and most treacherous roads. The winding and difficult terrain, especially in the winter or harsh weather, impeded travel, causing longer drive times and avoidable accidents. This triggered a government-funded project which appointed construction specialist, Empresa Portuguesa de Obras Subterrâneas (EPOS) to solve this country's dilemma. Launched in 1986, EPOS was already behind some of the most important road and rail tunnels in Portugal, Spain and Algeria. But this time, the company, with the help of Atlas Copco, began working on twin, parallel tunnels that successfully cut straight through the mountain. EPOS was able to control its expenses in the drilling area with a special fixed rate per cubic meter system that Atlas Copco provided.

"This is how it works: machines are running, EPOS is paying. If the machines are not running, EPOS pays nothing. Simple as that."

Hugo Dias, Business Manager Portugal

Carlos Russo, Production Director at EPOS, discussed the many challenges and restraints they faced on the project.

"Together with EPOS and based on the data that we had gathered, we estimated all the cost they would have with the machines running; spare parts, drilling consumables, service," Dias explained. "Then we adapted this to a fixed price based on the cost per cubic meter excavated. This is how it works: machines are running, EPOS is paying. If the machines are not running, EPOS pays nothing. Simple as that."

Epiroc operated under the trademark “Atlas Copco” prior to January 1, 2018.

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